Risk-Sharing and Retrading in Incomplete Markets

At a competitive equilibrium of an incomplete-markets economy agents’ marginal valuations for the tradable assets are equalized ex-ante. We characterize the finest partition of the state space conditional on which this equality holds for any economy. This leads naturally to a necessary and sufficient condition on information that would lead to retrade, if such information were to become publicly available after the initial round of trade.

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Year of publication:	2012
Authors:	Gottardi, Piero ; Rahi, Rohit
Institutions:	Department of Economics, European University Institute
Subject:	Competitive Equilibrium \| Incomplete Markets \| Information \| Re-trading

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Series:	Economics Working Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series European University Institute Working Papers Number ECO2012/03
Classification:	D52 - Incomplete Markets ; D80 - Information and Uncertainty. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009653951